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A critical appraisal Of Amway China's e-commerce strategy

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E-COMMERCE SYSTEM ASSIGNMENT A critical appraisal Of Amway China's e-commerce strategy COMP 5211 Pu Zhang P03091008 Amway China, a subsidiary corporation of ALTICOR will restart there e-business in china from 2004.Mr Yang CIO of Amway America Asia Area said to "IT TIME" that Amway China will start e-business in 32 cities in china. Amway put over 100 million Yuan in the IT field from 2000 to 2003 and the new annual budget will be 40 million. This traditional direct selling corporation found that combine their direct selling model with e-commerce will make their business into a new stage. I will make a critical appraisal which base on the strategy that they adopted. 1. Build an independent e-business website. In 1999, ALTICOR established an independent e-business website Quixtar in ord to make the customer's order and payment via internet. This makes a great success in America. So Amway China also creates a website for internet order, in charge of e-business .They also updata the website frequently and spend a lot of money in the hardware and software build. But there are something which can't be ignored, e-business always be considered as a reason which will reduce the profit by sellers, this contradiction in direct selling field is very evidently. ...read more.


Amway adopt "shop selling + employ salesman". Right now Amway holds more than 110 monopolistic shops and have more than 70 thousands salesman in more than 30 provinces in china. Since Amway decide to restart e-business in china, they found that if they want to mix this Chinese style direct selling model and e-business together there may have many conflicts. So Amway China didn't copy the America way. They make vip-customer system. Normal Customer can't buy products in the website, they must become a vip-customer for the qualification of buying products. But if you want to be a vip-customer you must sign a contract with the salesman, the customer who sign with the specific salesman will belong to this salesman. Obviously Amway China ignores a fact: in a strict way, Amway China isn't a traditional direct selling corporation anymore, they must face a problem that how to mix a new selling model and e-business. The problem is very clear: For achieve a "shop selling + employ salesman" e-business Amway China spend a huge sum investment in foundation facilities, If go back to traditional direct selling model, the investment which spend before will drop into water, but if continue the existing selling way, advantages of e-business like high efficiency and convenience will hardly reach. ...read more.


They use specific products to bring along the whole image. Since Amway China decide to start e-business, Amway Nutrlite's(The main healthy food product) advertisement is broadcasting in the most expensive Chinese TV station CCTV. From Jan 2001 Amway start to broadcast an advertisement which let the FuMingxia(the greatest diving player in china) to be the spokesperson. At the same time they also put a plane image advertisement on many media. On Sep 2002, Amway employ the Olympic gold medal winner TianLiang to be the image spokesperson. Amway China also support many sport events. Expect media advertisement Amway also make some investments in public welfare. From 1998 Amway China participates in contribution for more than 100 times, the amount is over 45 million Yuan this make a good figure in china. Amway's advertisement strategy bring them many unexpected gains, the celebrity of Amway grows very fast in china, this hardly happened in the other area in the world. Because of Amway China didn't make any advertisement before 2001, the most of Chinese people don't know what is Amway, They take the concentrated advertisement strategy won't let people have enough time to digest them. This will make people feel hard to accept. And for e-business Amway should make many online advertisements, So that people will know this system more clearly. At this stage , take a step by step advertisement strategy will be better. ...read more.

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